An elderly man pushes a dog in a wheelchair across a road as he buys vegetables at a market in Shenyang, in China’s northeastern Liaoning province on July 9, 2021.
AFP via Getty Images
Stocks were lower on Thursday, as China data showed growth slowing, energy prices fell, and investors watched another appearance on Capitol Hill by Federal Reserve Chairman Jerome Powell.
Weekly jobless claims dropped to 360,000, the Labor Department reported, a new pandemic low.
In afternoon trading, the Dow Jones Industrial Average was down 19 points, or 0.05%, while the S&P 500 fell 0.55%, and the Nasdaq Composite declined 1%. Equities finished mixed on Wednesday after Powell began two days of congressional testimony on the state of monetary policy and the economy.
China reported growth slowed to 7.9% over a year earlier in the three months ending in June, an indication that the powerful strong rebound from the pandemic was starting to normalize. The GDP reading also missed estimates of 8.2%. But the data was still robust, and China’s CSI 300 index finished up 1.3%. A mostly positive day for Asian stocks was bucked by a 1.1% drop for the Nikkei 225 .
The data out of China comes as investors are concerned that economic growth in the U.S. has peaked. Consistent with that thesis, the 10-year Treasury yield dipped to 1.30% from as high as 1.43% this week.
Oil prices extended losses from Wednesday amid speculation that Saudi Arabia and the United Arab Emirates have made progress toward a compromise on production levels. Not helping was data showing a drop in U.S. gasoline demand. WTI crude oil prices were down 1.7% to $71.90 a barrel.
Powell acknowledged sharp gains in inflation that have been showing up in recent data, but indicated it was too soon to ratchet down support for the economy.
Investors continue to keep an eye on rising cases of the more contagious Delta variant of Covid-19 that are increasing around the world, including the U.S.
Spain’s Balearic Islands were moved to the U.K.’s amber list on Wednesday, which means residents returning from vacations as of Monday must quarantine unless they have had a full set of vaccination.
Shares of renewable energy companies slid in Europe, with Spain’s Siemens Gamesa Renewable Energy slumping 14% after it warned of a fiscal 2021 loss as third-quarter provisions hit profitability. That had a ripple effect on Siemens Energy whose shares fell 11% after the Germany energy group said it would miss full-year margin guidance, following disappointment from its Spanish subsidiary.
Taiwan Semiconductor Manufacturing reported second-quarter net profit rose 11% from a year earlier, as chip demand remained elevated from the pandemic. The profit missed analysts forecasts, but shares were largely unchanged.
American International Group (ticker: AIG) stock rose 2.6% as private equity giant Blackstone will acquire a 9.9% equity stake in AIG’s life and retirement business for $2.2 billion. Blackstone (BX) shares rose 3%.
Morgan Stanley (MS) stock fell 0.4% after reporting a profit of $1.85 a share, beating estimates for $1.65 a share, on revenue of $14.8 billion, above expectations for $13.9 billion.
Advanced Micro Devices (AMD) stock slipped 2.8% after getting upgraded to Neutral from Sell at Citigroup.
Old Dominion Freight Line (ODFL) stock fell 0.3% after getting downgraded to Peer Perform from Outperform at Wolfe Research.
NXP Semiconductors (NXPI) stock dropped 4.7% after getting downgraded to Neutral from Buy at Mizuho.
Write to Jacob Sonenshine at jacob.sonenshine@barrons.com
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